Selling a home during retirement can raise a lot of questions, especially about whether it affects your Social Security benefits. The good news is that in most cases, selling your house won’t reduce or stop your Social Security retirement payments. The Social Security Administration doesn’t count home sales or asset value when calculating eligibility for regular retirement or survivor benefits. However, some exceptions do apply, especially for those receiving needs-based assistance like Supplemental Security Income (SSI).
For retirees collecting only standard Social Security or even disability benefits, selling a home generally doesn’t change a thing. But for those who also rely on SSI or Medicaid, the money earned from a home sale could push them over the income or asset limit. This might temporarily put their benefits on hold or even cause them to lose eligibility if they don’t meet certain requirements in time.
What Really Happens When Retirees Sell Their Home
If you’re retired and considering selling your home, the first thing to know is this: in most cases, it won’t affect your regular Social Security checks. Whether you’re getting retirement or survivor benefits, the Social Security Administration doesn’t base your eligibility on your assets or even your income from things like selling property. So simply selling a house won’t stop or reduce your benefits.
Also, where you choose to live after the sale doesn’t make a difference to your retirement payments. The Social Security Administration doesn’t factor in location or homeownership status when calculating standard benefits.
When Taxes or Benefit Withholding May Come Into Play
Even though selling your home won’t usually mess with your Social Security payments, it might still lead to some unexpected tax consequences. If the profit from the sale bumps up your total income for the year, you could end up owing taxes on part of your Social Security benefits, especially if you’re already close to the taxable income threshold.
There’s also something called the “earnings test.” This mostly applies to people who start collecting Social Security before reaching full retirement age. If you’re under that age and earn more than a certain yearly limit (which changes annually), Social Security may temporarily hold back some of your benefits. But don’t worry—once you reach full retirement age, those held-back payments will be paid back through higher monthly checks.
SSDI Payments Are Usually Safe
If you’re getting Social Security Disability Insurance (SSDI), selling your home won’t disqualify you either. Nearly 2 million older Americans over 65 receive SSDI benefits, and these are based on your work history and disability status—not on how much money or property you have. As long as you don’t return to work or reach full retirement age, SSDI payments will continue without interruption.
SSI Recipients May Lose Benefits
The only group that really needs to be cautious when selling a home is people receiving Supplemental Security Income (SSI). Unlike regular Social Security or SSDI, SSI is a needs-based program. That means the government looks at both your income and assets to determine whether you qualify. If you sell your home and suddenly have a large amount of cash in your account, it might push you above the $2,000 asset limit and make you ineligible for SSI and even Medicaid.
But there’s a bit of breathing room: If you use the money from your home sale to buy another house within three months, you may not lose your SSI. And if your remaining money after buying a new home is under the $2,000 limit, your benefits can continue without disruption. If not, your SSI could stop, but the good news is, the Social Security Administration gives you up to 12 months to “spend down” the extra money and reapply for benefits.
